Compensation in a Shifting Labour Economy
Balancing fairness, competitiveness, and sustainability.
The salary market is undergoing fundamental shifts, reflecting inflationary pressures, skills shortages, and evolving employee expectations. The rising employee expectations are forcing employers to rethink how they reward talent. In today’s market, compensation has become a strategic lever for attraction and retention.
The war for skills is most evident in ICT, engineering, renewable energy, and healthcare. Demand continues to outpace supply, pushing salaries upward. Mercer’s Africa Salary Survey (2023) reports that tech professionals in Africa are experiencing annual increases of between 15 and 20%, significantly higher than the average in other sectors.
Double-digit inflation in countries such as Nigeria, Ghana, and South Africa is eroding real wages. PwC (2023) notes that this has triggered growing employee dissatisfaction and waves of industrial action. Cost-of-living adjustments have become non-negotiable in many pay discussions.
The market is also seeing the rise of non-cash benefits, flexible working arrangements, wellness programs, and learning allowances are becoming just as important as salaries, particularly among younger workers. Deloitte (2022) highlights that nearly 60% of African Gen Z workers consider career development opportunities as a key factor in choosing employers, sometimes outweighing pay.
Globalisation adds another layer of complexity, remote work has normalised international hiring, exposing African professionals to global pay scales. This raises important questions about pay parity, wage gaps, and whether local employers can remain competitive.
The challenge is balance, overpaying is unsustainable and underpaying drives attrition. Ignoring non-monetary rewards risks disengagement. The future of compensation lies in integrated reward strategies that combine fair base pay, competitive benefits, and purpose-driven engagement.
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References: Mercer. (2023). Africa Salary Survey. Link, PwC. (2023). Africa Workforce and Pay Trends. Link, Deloitte. (2022). Gen Z and Millennials Survey – Africa Insights. Link
